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May 27, 2024
PI Global Investments

Solana, Avalanche Tumble as Bitcoin Slides Towards $40,000

Bitcoin (BTC) is taking a nosedive—and bringing major altcoins with it. The biggest digital coin by market cap is now trading for $40,640, having plunged by almost 4% in the past day, according to CoinGecko.

Over the past week, BTC has shed more than 6% of its value. Last week, the asset increasingly dubbed “digital gold” was fast closing in on $49,000 per coin for the first time since 2021.

BTC’s tumble comes after the historic approval of spot BTC exchange traded funds (ETFs). The popular investment vehicles started trading in the U.S. after 10 years of regulators saying no to them.

Some market observers expected BTC’s price to boom as a result as traditional investors now finally have exposure to the biggest and oldest cryptocurrency. But others, like data firm CryptoQuant, predicted the price of the asset would drop. And so far, it has—despite the roaring success of the ETFs.

BTC’s dip is coming as investors cash out their gains from the hype that built up before the approval of the ETFs.

Also, investors are fast cashing out of Grayscale’s Bitcoin Fund following its conversion to an ETF. Traders are exiting their positions to take gains after having previously been locked in to the fund, which is causing the fund manager to flog BTC.

Other top 20 cryptocurrencies have taken a harder hit. Solana (SOL) has shed nearly 7% of its value in the past 24 hours and is priced at about $89. The major coin had soared in value since October and touched a high of $122 in December.

Elsewhere, Avalanche (AVAX), is another big loser and has dropped by more than 8% in a day. It’s now valued around $31.50.

Cardano (ADA), too, which is the ninth largest digital asset in terms of market cap, is priced at $0.47, having plunged by nearly 7%.

Edited by Andrew Hayward

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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